OTTAWA — New home construction rose more than expected in December, led by multi-unit starts in urban centres such as Ontario and Atlantic Canada, Canada Mortgage and Housing Corp. said Tuesday.

The seasonally adjusted annual rate of housing starts was 200,200 units last month, up from 185,600 units in November. Economists had expected starts to total 185,500 in December.

"The increase posted in December was mainly attributable to the multiple urban starts, particularly in Ontario and in Atlantic Canada", said Mathieu Laberge, CMHC's deputy chief economist.

Urban housing starts were up 10.1 per cent to 181,900 units in December, with single-unit activity rising 3.8 per cent to 70,600 units and multiple urban construction up 14.5 per cent to 111,300 units.

Overall, urban starts jumped 52.9 per cent in Atlantic Canada, 35.3 per cent in Ontario and nine per cent in Quebec. However, urban starts fell 19.8 per cent in British Columbia and 11 per cent in the Prairies.

Emanuella Enenajor, at CIBC World Markets, said despite the stronger-than-expected rise last month, it "still leaves housing starts tracking below the hearty pace seen in the summer."

"Looking beyond the month to month volatility in the housing starts numbers, the upward trend in homebuilding evident in the first half of 2011 has clearly tapered off as 2011 came to a close," Enenajor said. "A sideways market in residential building permits confirms that while low interest rates are helping to support housing construction from measurably deteriorating, the market will likely flatten out from here — feeling the brunt of a slower pace of economic growth."

On Monday, Statistics Canada reported the value of building permits fell in November, led by a decline in non-residential intentions, especially in Ontario. Permit values were down 3.6 per cent to $6.1 billion during the month, after a 11.6 per cent increase in October, the federal agency said.

Still, the November number beat economists' forecasts of a five per cent decline in permit values.

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